New home sales have dipped for the first time in 2014.
Sales were down 4.3 per cent in May, according to figures from the Housing Industry Association (HIA) on Monday.
Detached house sales fell by 2.2 per cent while multi-unit sales dropped 16.1 per cent.
Despite May’s dip, the outlook for new home sales remained healthy, given that this was the first decline for the year, said HIA chief economist Harley Dale.
“Further upward momentum may be a challenge and it is a distinct possibility that new home sales have peaked for the cycle,” Dr Dale said.
“The volume of new home sales, nevertheless, remains consistent with further growth in detached house building and the continuation of historically elevated levels of multi-unit construction in 2014/15.”
Dr Dale said construction of detached houses could grow faster in 2014/15 than in 2013/14, but this was being constrained by land supply shortages in Sydney and Perth.
“Inadequate land supply is one prominent example of supply side constraints preventing new home construction reaching its full potential, highlighting the need for a focus on housing policy reform,” he said.